If the current opportunities and incentives aren't enough to get you serious about real estate then face reality, you'll always be a renter. Well, maybe not always but you would've squandered an historical opportunity to make a nice profit from buying a home. California residents who are in contract by April 30th 2010 will receive better incentives than most other States.
A lot of wealthy people created their wealth from real estate. Why not follow their lead? Most started with a condo or a starter home and kept buying. Imagine if you owned 3 rental homes free and clear, collecting the monthly rent. If it's enough you wouldn't have to work any more.
10 Incentives and opportunities to buy now:
1) $8,000 First time home buyer federal income tax credit
2 )$10,000 California State Tax credit
3) Sellers are likely to pay your closing costs
4) These are low prices for San Diego county real estate
5) Historically low 30 year fixed rates
6) Loans over $417,000 now qualify for low FHA and conventional rates
7) Fannie Mae Homepath financing doesn't require an appraisal and also offers renovation loans
8) PMI is tax deductible (consult a CPA to verify you qualify)
9) 100% purchase loans without PMI available through USDA financing
10) HUD’s Good Neighbor Next Door Program sells homes at 50% off list price
If this doesn't get you going nothing will. I understand that not everyone can or will own their own home. Maybe their job requires them to move constantly or a recent event like a bankruptcy prevents you at this time. For those of you who stay in one place and could or might qualify, your landlord thanks you. Your landlord has to have someone to pay them rent so they can pay off their real estate investments. I'm sure they appreciate your commitment.
If you want to pay off your own investment instead of theirs then contact us. You will find everything you need to get started on our website. We even post up to date rates with loan fees next to them so you don’t have to guess as to what it will cost you.
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Nevin - I'm not sure there is anything else you can say to get people motivated to buy a home, given the interest rates, inventory and the tax credits, especially in California.
Jeff
Awesome blog Nevin! Reblogging, flagging...
This is one of the best blog posts I've seen, and I read them everyday. GREAT WORK.
Hi Nevin,
Great article !!!!!!
Yes, Hard to believe when all the business sense points to ...sensible,easy decision to make..!!!
Fear or procrastination seems a few of the road blocks people need to get over !
Jeff - I agree. Can't help those who don't want to be helped.
Andi - Thank you! I appreciate the reblog and the flagging for feature.
Charles - Thank you sir!
Robert - Thanks! I wonder if it's fear of failure or fear of success? By the way you have to get rid of this lobster pic. Everytime I read your blog I get hungry!
Nevin: what a compelling argument. I've heard many but this has just about every reason imaginable as to why renters should at least contact you to find out if they qualify. The opportunity will never again carry as much incentive. Best wishes!
Beautiful! I always tell the renters, "what do you mean you can't afford a house, you are already buying one for your landlord!".
You can lead a horse to water.......
Good post!
Lots of good reasons to buy now. What seems to be holding some people back is the fear of losing their jobs.
Great post! I have people that are on the fence about buying right now. i just want to grab their head and shake it really hard....what is there to think about?
Nevin, nice thought provoking post. Not everyone is meant to own a home. It may upset some realtors to hear that but it is true.
I love it when people tell me, I should have fill in the blank five years ago. Well, this is five years ago in the future. YOU SHOULD HAVE BOUGHT REAL ESTATE when the prices were so low. Five years ago, yes, you should have sold your house, but you didn't. Why? Because real estate was so high, and you knew it would go higher. Well, now, real estate is low, and it will go lower. Right? Right? Well, aren't you right? I can't hear you.
Good stuff, Nevin. I love Cynthia Larsen's comment, gonna use that!
Nevin, I try to explain this to the renter I meet and those potential buyers who are on the fence. You are so right!
I think that some people still feel that there is a person who rings a bell when the bottom has hit. That same person makes sure that interest rates are at an all time low at that time and that there tons of incentives in place so people can literally steal a home.
Hi Nevin -- Great reasons to buy. There is a reason it's called a "buyers's market." Sometimes buyers need to realize that there is never a better time to buy than if a local market is truly a strong buyer's market. But the pyschology is that buyers are more motivated when it's a seller's market, go figure.
Hi Nevin! AWESOME list like I've never seen before! But, then I wouldn't expect any less from you! You TOTALLY rock!
Great post, Nevin. I know I'm working my buns off trying to get just one or two more transactions into the pipeline to get the tax credits. If only the banks were being a little more coooperative I probably could have helped a few more renters become owners.
I do believe if people aren't buying now, they never will.
Nevin, I've never seen a better time to buy a home. Even when the $8,000 go away, interest rates are still low and there are some incredible deals out there!
CAR (California Association of Realtors) announced today that they expect the $100 million for first time home buyers to be gone in as little as 10 days from launch date!
The way it is in my local market, rent might be $300-$500 LESS than a monthly mortgage payment. But for those that need a tax write-off (singe fillers really get NAILED) it's a great trade-off (trade-up) and real estate can appreciate in time.
Nevin this is a great post and testimonial as to why renters should buy now with all the great opportunities.
I do think a lot of the hesitation has been over the current economy and jobs situation and fear of losing a job and as Carla said -- they can currently pay the rent but fear a mortgage.
Sue of Robin and Sue
Great to see yet another source pumping this information to the public!
Nevin - This is great to point out to first time buyers who are still on the fence wondering what they should do.
I see too many renters with $600+/month car leases. It's amazing how many people have cars that are stopping them from getting a mortgage. Some people's value system is seriously out of whack.
Good morning Nevin,
Ditto what Debe said!! This is the best list I've seen complied. Richard has a valid point..some of the high car payments people take on do prevent them from qualifying for home ownership!
Nevin so true. Thanks for this post. But there are people that just can't see what we can.
Responsible people do not wish to destroy their hard earned credit and get tripped up in this administration's games!
Property taxes will continue to climb, condo fees go up with no real input by the owner, and the world has seen their nest egg in owning a home fanish.
When we purchase a car we know we lose money immediately! But we never thought that home ownership was anything but a place to save money. More two working people families live with the threat of one of them losing their jobs and then what?
Forget stupid incentives....we need a solid government and a positive outlook for the country...not one of increasing taxes and uncertain job market. We are back to still ruining the economy.
Government is going for a national tax on all goods and services....just what disposable income do people have.
GET NAR TO PRESENT OUR VIEWS TO THE GOVERNMENT...BACK NAR...AND MOST OF ALL PRAY THAT OUR COUNTRY CAN SURVIVE!
WE ARE NO LONGER GOVERNMENT BY THE PEOPLE "WE THE PEOPLE"!
The original PAINTER
I disagree. No one should buy a house just because the interest is low, inventory is high, or, the government is giving away money on a tax credit. You buy a house when you are ready to make that big move in your life. If someone thinks they are going to be living in another state, city, town in two years - its most likely best for them to rent. If the dollar amount is greater to buy than to rent then one needs to look at the variables in the transaction by sitting down with a mortgage and tax specialists or doing the math themselves.
But, I like your post. There are many incentives to encourage those that are ready for home ownership to make the big move and we should point them out. Good Luck in 2010.
For many people, this is a good time to buy. But I think some people are looking at what has happened with people losing their homes to foreclosure that makes them stop and think more about it. If they don't have a job tomorrow, they may end up in the same boat. Also, one of the things that is occurring more frequently is that young buyers may have a great job but their STUDENT LOAN DEBT is so high that they can't afford much, if anything. I had one client who had to extend his loan out many more years just so he could qualify with his debt/income ratio.
Nevin, good reasons for getting off the fence and purchasing a property. Thanks.
You're talking my language. I have been blessed by California investors this decade, and they are still buying rental property here. They should be buying a personal home in California while they are at it for the reasons you name.
It seems like a no-brainer,, but if we all thought the same way, what a boring world it would be. Real Estate still is a great investment!
Great post----article, info, links---ALL OF IT---hope you get it out there---It is really to the point!
Well done Nevin!
And congratulations on the featured post status. You deserved earned it!
Why is that renters always buy the BMW or Lexus BEFORE buying a home?
Nevin, don't spill the beans! I have lovely tenants in my rental properties, and I don't want to lose them.
Cheers,
Robin
First off, thank you everybody who reads my post! I hope you can benefit from it.
Cari – Thanks! I have more reason they should try than they have to not try
Cynthia – I love it! That is brilliant
Ryan & Sheri – I hear ya!
Joan – I would have to agree and that is a good reason to hold off.
Whitney – I think it may be fear of success
Erica – I completely agree. Those who don’t own will have to live with their decision and it is usually less advantageous than owning.
Don – LOL No kidding!
Bart – That is a great line from Cynthia! Hey, someone should write a blog with all of the best “lines” they have heard.
Risa – Thanks!
Ruthmarie- Of course! We all want something for nothing! LOL
Chris – It’s the opposite mentality They feel there is a shortage so I better stock up
Debe – Hi there! I could a dd a few more LOL Thank you for the kind words. I enjoy working with you and your clients. We’re having fun aren’t we?
Dave – I agree somewhat. A lot of this is the loan officer and clients fault. There are banks that close loans quickly, albeit at a slightly higher rate. Rate shopping to extremes is what kills transactions. Find good fast banks and get it done. I personally would rather pay an extra $20 a month to get into a home I love than lose it over that! The loan officer needs to take control and submit these loans to lenders who have a reputation for closing quickly.
Tammie – Yep!
Gary – I agree. Once the incentives go away we will be flooded with buyers wanting to buy…go figure!
Vickie – That’s because that amount will only cover the taxes of about 50 homeowners buying expensive CA real estate! LOL Just kidding ; ) I believe it because that is an incredible deal.
Carla – I understand that in markets where rent is less than a mortgage it might seem less advantageous. When I bought my first home my mortgage was much higher than rent for a comparable home. I saw the “big picture” that many renters don’t-pay it off and own it.
Robin and Sue – Carla hit it on the head- many renters only see a few months in the future instead of looking at long term benefite. They don’t realize that their rent rises but their mortgage stays the same. In a few years rent will be more expensive than the mortgage payment but they don’t think about that.
Travis – Thanks
Christine – Thank you! I hope they read it and heed it!
Richard – That’s because you gotta look cool instead of securing a financial future.
Dorie – The Wall Street Journal did a study on this or published a study done by someone. The study found that parents with financial magazines and newspapers laying around the house versus homes with hot rod magazine and other entertainment magazines: their children were much more likely to have financial security at an early age than those without financial information. Most would own a home in their 20’s and many would be prepared for retirement on average 15 years before their peers. In my opinion, Those who drive nice expensive cars and choose to rent when they will not be moving around are usually a reflection of a family that did not emphasize financial discipline or lack a financial education.
Gabe – So true
Sonny – I have decided to cautiously discuss my distaste for government. However in the end, if I buy a home on a 30 year fixed rate mortgage and do not refinance. Within a few years my mortgage payment will be less than rent. The past few years are an indication of folly and today’s market is much more stable. Although we have a tough time controlling our elected leaders we do have much more control in making sound financial decisions in our daily lives.
Gregory – That is why my post states: I understand that not everyone can or will own their own home. Maybe their job requires them to move constantly or a recent event like a bankruptcy prevents you at this time
Peggy – these are great points. There are going to be people insituations that would make buying a home detrimental. This post is written for those with no job or income issues. You would be amazed at how many people do qualify and don’t have extenuating circumstances that would qualify and benefit from home ownership.
Michael – thanks
Joe – We think alike!
Wanda – Valid point. But maybe just 1 or 2% more could think like we do?
Heidi – Thank you!
Craig – Thank you sir! And I thank you for introducing me to Active Rain back in 2008
Jenna – See my comments to Dorie #27
Robin - I wouldn’t worry too much. .If they were reading AR blogs they would have been gone a long time ago!
When I have a $1200 per month home for rent, and someone comes to look at it I tell them they have to prove minimum income and have good credit. If they say, 'No problem' I ask them why they don't buy then. And some do - it just took someone pointing out the obvious.
You have a great list of reasons why to buy right now. I hope everyone takes notice and follows your advice.
Most people have no idea it is going to become even more difficult to buy in the future. Interest rates will probably be through the roof.
Joetta - That is a brilliant way to get leads!
Nicholas - Me too!
Ron - I'm not convinced rates will be through the roof but I do think they will be higher,
Nevin you should of posted this a few months ago!! LOL. It may be too late now! Great job!
Jennifer - What do you mean? It's January isn't it? LOL
Great Post, and I agree though with Gregory, not everyone shuld buy or is able to buy, but if a person is able to and wants to move from renting then this is their moment.
Nevin,
Great post, if you can't see the perfect storm...
On the marketing front. Great Title/hook and strong content. it may seem like you are pointing out the obvious but sometimes the obvious needs to be highlighted.
Even tho they are a renter, they're still making a mortgage payment !!! Somebody elses !!!!!
Rent ratios still at historical highs in California. National average is now 15-18 and my area in South Bay Los Angeles is still at 36. Could the fundementals, basic real estate valuation and common sense still be all wrong? Financially, it makes more sense to rent on an overinflated market right now. The tax incentives and (lack of) appreciation do not justify purchasing a home economically. The only reason to buy a home now if because you want to live there, for at least 5 years. Why would you want to pay mortgage, taxes, insurance, HOA, repairs etc which will be 3-4 times the rental rate for the same property??
Gary - thanks
Scott - I hear people with the "we're doomed" message. If there is a perfect storm then why is everybody still living in the USA and why are so many still in real estate? If people really believe it is the perfect storm coming then why not protect themselves and run away?
Thank you for the nice feedback on my content and title.
Michael - Yes sir! You got it right!
Jonathan - If you say so. Financial reasons aside. You pay your rent on time and suddenly the sherrif tells you to vacate the premises due to the landlord foreclosing. I would keep my home for a minimum of 5 years. Take the 18,000 tax free income from tax credits and divide those by your rent and figure out the difference. The first 1 1/2 years are paid for. Pretty good investment in my book.
Oh, yes we ARE! It's going to be a great spring!
Don't make "renter" sound like a put-down. Some people (as you mentioned) have sound reasons to rent, and some people JUST PREFER it, and that's OK. Not everyone wants the responsibility of owning.
%5 down is back in town too. Conventional Financing with MI up to 95% on condos. Great for Complexes not FHA approved. Renters should do their math and weigh up the pros and cons.
PMI on a 95% according to my lender today is currently .73%. an estimated example based on a 300k loan you would add $182.5 for pmi per month and as Nevin mentioned check with your CPA if you qualify to write that off along with your interest and taxes. Once you have 80% LTV you can have the PMI removed. Usually through refinancing. This is conventional so no up front FHA fee. ;) Your on the money in my book Nevin and your subject animation above says it like it is.
Debe - going to be a good spring? It is a good spring! LOL
Leslie - I guess it had to happen. Motivational posts will always ruffle someone's feathers. Sorry you took it as a put down but I'm not sorry for my post. I stand behind it 100% because I can't remember ever hearing someone say I hope to rent someday except a young kid or teenager. Thanks for reading my post.
Brett - Thank you! I appreciate the nice words. Yes the 95% is back and it rocks!
Nevin, great article with great reasons to stop sitting on the fence and buy a home!
Nevin,
There are so many financial incentives, state and federal, now especially for first-time buyers that they ought to stir plenty of fence-sitters into action. Take the lower half of the market in Vegas, prices are just delicious all across.
Fear is always going to keep some people from moving forward. If they want to move....but are afraid, then there is nothing you can do.
The first time FHA buyer is being frozen out of the market by the cash buyers.
Jon - Thank you!
Esko - Vegas is sizzling hot right now! I often read Renee Burrows blog and all of her market stats for Vegas.
Karen - I agree however some may be on the fence and need a little nudge. When I was renting an apartment in carmichael CA back in the 80's I had to make out my rent check to Pearl Investments. Then I looked at all of the taxes I was paying on my UPS paycheck and it set me off. I was sick and tired of giving my money to someone else and not having the freedoms that a home owner has. Those 2 things were enough to "nudge me" into buying. It was one of the better decisions of my life. Had I read a blog like this I would've responded by calling an agent.
Gene - not in all parts of the country
Nevin, I get your point but those of us who have rentals love renters!
Nevin, I get your point but those of us who have rentals love renters!
Yes this is a great time to buy and those are excellent points on why people should, but lets not forget not everyone should own a home and pushing, frightening, or making them feel they are loosing out is what got us into this mess.
Soe people, especially those in cities like New York and Boston, are so accustomed to renting that when they move they have trouble making the transition to owning.
You are definitely the go to guy for low down or no down payment assistance :) What a wealth of info Nevin!
Damon - If you love them too much you will be out of business!
Gary - I guess you didn't read my entire post: If this doesn't get you going nothing will. I understand that not everyone can or will own their own home. Maybe their job requires them to move constantly or a recent event like a bankruptcy prevents you at this time.
Melissa - Now that is an excellent point that I never thought of. I hope they read my blog! LOL
Renee - Thanks! To some of our readers my sense of urgency = being pushy. Sometimes you have to call it like you see it.
I've read this title and this post several times now.
I find nothing objectionable about the content of your blog post. But the title really bothers me.
It seems you are trying to challenge current renters to become owners by insulting them. If they don't take your advise, they will never be anything more than a renter. I could use a lot of words to try to explain how I react to this. Let's just say I don't like it.
Robin - you are absolutely right.